It's silly to look to the futures market for guidance, I'll admit right off the bat. Especially in the Leak investigation. The only people who truly know what's going on -- the lawyers in the Special Prosecutor's office -- likely don't have the time to make trades on
Intrade. There's no evidence that the traders know any more than any other junkie refreshing Daily Kos, Drudge Report, HuffPost, Washington Note, etc., every twenty minutes. They're probably reading the same tea leaves. Still, even an observer as savvy as
Joh Marshall noted the recent collapse of Miers futures, falling from $60.00 to $35.00 in one day. Were insiders doing their best Dr. Frist impersonation and cashing in? It may be nothing, but then again, who knows?
Provided that we can make anything of dramatic shifts in future contract prices, what's to make of the sudden drop in the Karl Rove indictment futures from $63.00 yesterday to $45.00 today? (For those unaware of what these prices signify, it means the futures traders now believe that there's only about a 45% chance of Rove getting indicted, down from 63%.) Note that today is the first time since the issuance of Rove's contract that the price has fallen under $50.00. Are some "uber-insiders" now dumping the "Rove indictment" futures after getting confirmation from the inside? Now, I'm just a simple Fitzmas junkie, and to my eyes, that price looks pretty tantalizing, especially considering this
BREAKING! report from the
LA Times that detail Fitzgerald's renewed focus on Rove.
Putting aside the question of whether futures traders know anything more than the rest of us, the question I want to pose is a psychological one. That is, if you're inclined to put some money on this, is it better to:
(a) Buy Rove futures at a good price and cash in when Fitzmas delivers the frog-march orders. (Buying at $50.00 price will get you a one-to-one return on your money if Rove gets indicted.)
(b) Hedge and sell Rove futures (in effect betting that Rove won't be indicted). What you're hedging against is -- how shall I put this? -- emotional devastation. Let's face it, many of us are emotionally invested in Fitzmas. I know I'll be pretty down if Rove gets off, but if you bet against indictment, at least you might have a bit of winnings for the watering hole after work. If Rove gets off, I think many of us will need a drink. Or two. Or three. If Rove doesn't get indicted, at least you'll have show some profit as a consolation prize.
Some people bet against their favorite team under this notion of hedging against disappointment. Good idea?
You know what? I'm gonna make it a poll question.
Full disclosure: I was thinking of hedging, but I ended up buying $60.00 worth of Rove indictment contracts at $50.00 contract price. I had promised my friends that I'll throw a party if Rove is indicted, and this will cover the paper cups and plastic party hats.